A milestone moment in the financial technology world happened when a first challenger bank received its banking license, making FinTech a one-stop shop for financial services for individuals and businesses. Any service in banks’ value chain can now be substituted with a FinTech option from an array of solutions.

However, FinTech alternatives put together cannot be considered a full equivalent to a traditional financial institution mainly because those industries were originated with different goals and often target different types of customers. The democratization of financial services and the goal of addressing the needs of underprivileged groups of the populationrather than the eligible middle class has been a hallmark of financial technology startups.

The scale of financial exclusion, extreme poverty in some countries and inability for the traditional financial sector to innovate fast made it possible for FinTech to grow from a niche into a massive industry. Without 2 billion people being excluded from the formal financial system and 1.5 billion being unable to prove their identity, there probably would not be such a fertile ground and so much attention for tech-powered cost-efficient solutions to prosper. In addition, technology startups did not really have an IT ‘luggage’ to carry around, faced minor regulatory obstacles, used more streamlined and automated operating models and had other advantages.

Not only is there a FinTech alternative for any bank service, but banks also themselves find themselves looking for an opportunity to rebuild legacy infrastructure with some of those alternatives. For that, there is a whole class of technology companies behind both innovative banks and FinTech startups that are just addressing enterprise needs to modernize traditional players. Among banking technology companies worth mentioning are FIS, Ripple, Tagit, Plaid,Backbase, Temenos, Sunguard, DemystData, Figo, FinGenius, etc.

Some professionals, like Indrek Neivelt, the CEO of Pocopay, even debate the need in banks at all, saying, “We are bankers who believe that people don’t necessarily need banks but people still need banking. We are also designers and engineers who believe that there is no excuse for complicating everyday things with an outdated design.”

As WEF points out, the initial monopolistic environment created by the banks made it difficult for challengers to enter the market. As a result, the early disruptors in financial services had to introduce greater transparency in order to compete. With greater transparency comes greater freedom and greater choice. This has set the wheels in motion for a revolution in the sector. The organization suggests that “in 10 years’ time, the sector will have transformed and the balance of power within the relationship between the consumer and the providers of financial services will have fundamentally changed.”